Differences Between Employment Verification and Reference Checks

It’s not uncommon to hear the terms “employment verification” and “reference checks” used interchangeably. However, despite the common belief that these terms mean the same thing, the reality is quite different.

Both employment verification checks and background reference checks are widely-used to confirm a candidate’s employment history, but the processes are drastically different. This guide explains the meaning behind both checks, what’s involved and how they differ while explaining how employers can use both methods to help make smarter hiring decisions.

What is a Reference Check?

As part of the pre-employment screening process, employers will ask candidates to connect them with nominated personal and professional references. This is what’s known as a reference check.

The employing organisation will gather additional information about the candidate’s job responsibilities, history, performance, successes, failures, strengths and weaknesses, and how their productivity and communication skills translated during their role.

While reference screening can take time to complete, it’ll usually occur once the HR team has selected the right applicant. As such, there is a debate about whether the references can be considered valuable for making more informed hiring decisions. By that point, an organisation is unlikely to change its mind.

How Do Reference Checks Work?

Traditionally speaking, character references are conducted via a phone call. This process often involves hiring managers and recruiters spending hours verifying data and chasing down references.

Nowadays, far more time-saving, cost-effective, and efficient solutions exist, such as digital reference checks, which are all handled online.

What is Employment Verification?

The employment verification process is conducted similarly to a standard personal or professional reference check, but involves a prospective employer confirming a candidate’s work experience with a previous employer.

A past employment verification call between past and future employers will verify job-specific facts, such as job titles, start and end dates, and reasons for leaving or termination.

Similarly to standard reference background checks, conducting an employment verification call can take hours, offering very mixed results. As such, digital employment verification has paved the way for hiring managers to save time in all parts of the hiring and interview processes.

How is Employment Verification Completed?

Like reference verification, recruiters or hiring managers will need to connect with previous employers via telephone to verify the necessary candidate information. This process is also similarly conducted towards the end of the hiring process.

Automating the background employment verification process and beginning it earlier during the search and selection process can save recruiters even more time. Automating this manual process will provide hiring managers with crystal clear information ahead of time.

Why Hiring Managers Conduct Employment Reference Checks and Verification

Both reference checks and employment history checks are essential elements in a company’s background screening policy. Below are just some of the reasons why and how they can benefit organisations.

  • It’s easy for candidates to lie or mislead employers on their CVs, so uncovering red flags early in the recruitment process can be far less risky for organisations.
  • Hiring unsuitable or unqualified candidates can have drastic consequences if they don’t have the skills or experience to fulfil the job requirements.
  • Verifying important factors about a candidate’s prior work experience can help managers play to their strengths and account for their weaknesses.
  • Confirming how a candidate has previously performed in past roles can work in a future employer’s favour, allowing them to find effective ways of ensuring good job progression for the candidate.
  • It builds trust between candidates and employers, which can be vital if a candidate is expected to work autonomously or handle sensitive information.

Embracing Remote Hiring

The COVID-19 pandemic has drastically impacted how companies hire and screen employees, with many embracing the prevalence of remote hiring practices. Many background checks operate in the same way, giving employers a high level of control and transparency on all their requirements and progress on each ongoing check.

This doesn’t just apply to employment verification or reference checks; the following lists other examples of pre-employment checks that can be conducted remotely:

Bespoke Background Check Packages from Eurocom CI

Eurocom CI is a multifaceted background check agency with a proven track record of developing bespoke solutions for clients across multiple industries. Our software makes your recruitment processes easier and more streamlined, regardless of which type of background check you require for your candidates and how many are necessary.

To request a free demo or find out about the wide range of checks available, please get in touch with us.